PERM Background

The Centers for Medicare and Medicaid Services (CMS) developed the Payment Error Rate Measurement (PERM) program in response to the Improper Payment Information Act, 2002 IPIA, Public Law 107–300, enacted November 26, 2002.

 

The Payment Error Rate Measurement, commonly referred to as PERM, is a comprehensive, ongoing federal audit to measure how frequently errors occur when providers submit claims to states and when states pay those claims. This federal audit includes examining submitted claims that have been approved and paid, as well as claims that have been denied. All 50 states will be measured over a three year period. Idaho, along with 16 other states, has been selected to be one of the first states to undergo the federal audit for federal fiscal year 2009 (October 2008-September 2009). A state and national payment error rate will be announced after all data is collected.

 

The Payment Error Rate Measurement is designed to estimate the proportion of Medicaid payments made erroneously. The estimated payment error rate is calculated as the ratio of the dollar value of all inaccurate payments to the dollar value of the total payments. The dollar amounts of any errors identified (overpayments and underpayments) are tracked and used to calculate the final payment error rate. The state specific estimates will be used to establish national payment error rates for Medicaid and SCHIP.

 

The Centers for Medicare and Medicaid Services selected three national contractors to conduct PERM:  

 

• The Lewin Group, which provides statistical support by producing the samples to be reviewed and by calculating Idaho’s error rate.

 

• Livanta LLC, which provides the documentation/database support by collecting payment related policies from states and by medical records from providers. Livanta LLC will be contacting sampled providers for medical/service records.

 

• Health Data Insights, which examines the accuracy of the claims processing system and the medical necessity of the service for which payment was claimed.

 

Contact information

 

Telephone: (208) 364-8444